Demand-pull inflation
What is "demand-pull" inflation?
Expert
This is a common form of inflation in which demand outstrips supply to cause a rise in price and therefore inflation. In the AD AS approach in macroeconomics, it is shown as a continuous rise in AD with a constant AS. This rise can be due to a rise in any of the components of AD- consumption spending, investment spending, and government spending or net exports. If the economy is not on full employment level then the rise in price is accompanied by a rise in GDP as well. However if the economy is already at full employment then there is no rise in GDP, only price rises. This kind of demand pull inflation is less acceptable and more damaging to the economic agents.
As longer time periods are taken and a bigger range of adjustments (or substitutions) become obtainable, then demand curves tend to become: (1) flatter, as supply curves become steeper. (2) Steeper as supply curves become flatter. (3) Flatter, and therefore do supply
Why is interest received classified as revenue receipt? Answer: Interest received is a revenue receipt since it does not build any liability nor it leads to the red
What are the limitations of using GDP as an index of welfare of a country?A) The N.I. figures provide no indication of the population, skill and resource of the country. Thus the levels of welfare stay low.B) A higher N.I. migh
Imperfect information at times causes consumer’s attempts to maximize their contentment to fail since: (i) Prospects are imperfectly realized, and trial-and-error prototypes can lead to mistakes. (ii) Sellers might exploit asymmetric information
Why the repayment of loan is a capital expenditure? Answer: Repayment of loan is taken as a capital expenditure since it diminishes the liabilities of Government.
"In corn market, demand often exceeds supply and supply sometimes exceeds demand." "The price of corn rises and falls in response to changes in supply and demand."
What is Supply schedule and how it is related to supply curve?
The origin of economic growth can be traced back to Adam Smith's Wealth of Nations. InSmith's view, economic growth of a nation depends on the 'division of labour' and specialization, and is limited by the limits of div
In a graph of competitive market in equilibrium, the net surpluses producers and consumers enjoy generally equivalents the area among the: (i) Demand and supply curve however to the left of point of the market equilibrium. (ii) Horizontal axis and a 45°line origin
Illustrate a point on consumption curve at which APC = 1. Answer: APC = C/Y = 1 is possible when C = Y, that is, Consumption is
18,76,764
1943153 Asked
3,689
Active Tutors
1425606
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!